Equity benchmarks bounced back on Monday after losing more than 2 percent in previous week. Buying in index heavyweights and positive European cues ahead of Draghi speech & Fed policy meet helped the market gain.
Overall it was a consolidation day as the market started session on a negative note following weak Asian cues but managed to recover after couple of hours of red tick. The 30-share BSE Sensex rose 105.92 points to 25150.35 and the 50-share NSE Nifty gained 39.60 points at 7650.05.
Analysts expect the market to consolidate or remain rangebound till the outcome of Federal Reserve meeting that will be on Wednesday midnight.
Chris Wood, CLSA says Federal Reserve rate hike now looks finally set to happen on December 16 following last week’s US employment and wage data.
According to him, it will be interesting to see how emerging market currencies behave into and after the presumed rate hike.
On the global front, European markets like France’s CAC, Germany’s DAX and Britain’s FTSE were up 0.5-1 percent as investors looked ahead to the US Federal Reserve’s meeting this week. Asian markets barring China ended lower following correction in crude oil prices. Brent crude was down 1.13 percent to USD 37.50 a barrel.
Meanwhile, the rupee hit fresh two-year low today. The currency declined 21 paise to close at 67.09 a dollar (the lowest closing level since September 3, 2013) on strength in US currency ahead of likely hike in Fed rates.
The broader markets also traded in line with benchmarks; the BSE Midcap was up 0.66 percent and Smallcap gained 0.4 percent. The market breadth was positive as about 1498 shares advanced against 1140 declining shares on the BSE.
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Infosys was up 1.6 percent after the country’s second largest software solutions provider has invested USD 3 million in Whoop, Boston-based maker of health and fitness analytics tool for athletes. TCS fell 0.4 percent as analysts feel Chennai floods may impact its third quarter earnings.
Maruti Suzuki rallied 2 percent as Prime Minister Narendra Modi says Japan will import company’s cars manufactured in India. Analysts feel with this, exports may increase by 25 percent. Mahindra & Mahindra, which was down in morning trade on Delhi diesel ban news, rebounded with 2 percent gain after agencies told CNBC-TV18 company may acquire Italian car designer Pininfarina.
Coal India gained 2.6 percent. A media report indicated that opposing an immediate stake sale in company, foreign investors have told the Finance Ministry that further disinvestment in the coal miner should be put off as the current market valuation is low.
Among others, HUL, Sun Pharma, Dr Reddy’s Labs, Wipro, Hindalco Industries, Tata Steel and Vedanta were up 1-3 percent while ONGC, Tata Motors and Axis Bank fell 1-2 percent.
In broader space, IL&FS Engineering and Construction Company rallied 17 percent on getting metro rail link contract worth Rs 374.64 crore in Gujarat.
Reliance Communications climbed 6 percent on likely sharp reduction in consolidated debt post stake sale in tower business. Brokerage CLSA has upgraded the stock to outperform from underperform and increased target price to Rs 90 from Rs 75 earlier.
Natco Pharma was up 2.9 percent after the company and its US-based partner Alvogen has settled infringement suit with Gilead and others for generic Tamiflu, an antiviral medication. Additionally the company has received approval for generic Daclatasvir in India. The drug is used to treat Hepatitis C.
On the economic data, the country’s wholesale inflation, which has been in negative territory for thirteen months now, eased a bit, with the wholesale price index coming in at -1.99 percent in November compared to -3.81 percent in October and versus a forecast of -2.59 percent.